Condo investors account for less than one-fifth of those who own units in two of North America’s most expensive housing markets, according to survey results fromCanada Mortgage and Housing Corporation (CMHC).
But as Vancouver and Toronto grapple with tightvacancy rates and high homeownership costs, data released August 8 shows 6.9% of condo investors maintain vacant units.
The CMHC surveyed more than 42,000 households in Toronto and Vancouver, and found 82.9% of people who own a condo reside in it year-round. Meanwhile, 17.1% of owners are considered condo investors — people who possess both a primary residence and a secondary unit.
It’s the first time the CHMC conducted a survey of this nature. CMHC chief economist Bob Dugan said they wanted to narrow in on Vancouver and Toronto since those are the country’s two biggest condo markets.
“All these kinds of things gives you a sense of the skin the game that these investors have, what their intentions are with their unit and gives you insight into these particular investors,” he said.
What the CMHC survey did not include was figures on foreign investors.
Dugan said he hopes they can provide that information in the future, but he admitted the data is hard the collect.
The organization previously measured data in land registries and compared it to where the tax assessment was sent.
Dugan said the CMHC came up with an estimate of 4-5% foreign investors, but they were not confident about the data since investors could have gone through property managers or law firms to purchase their units.
The survey also found 8.4% of local condo investors anticipate selling off their secondary condo within two years, while 54.4% of Vancouver investors plan to hold on to their unit at least five more years.
The most striking difference between Vancouver and Toronto is how much investors expect their secondary unit to increase in value.
In Toronto, more than half of investors (56.1%) anticipate the value of their secondary units to go up in the next year.
But in Vancouver, just 36.6% of condo investors expect to see an increase in their units’ values.
More than half (53.2%) of investors said they purchased their secondary condo unit to generaterental income.
While the vast majority of investors owned just one secondary unit, 15.7% owned two secondary units and 9.8% owned three or more units.
Received from BIV